Citations
- 653 S.W.2d 539
Full opinion text
OPINION
REEVES, Justice.
June 3, 1980, the City of Laredo (City) issued an invitation for bid on its deposits of funds for a two-year period. The Union National Bank of Laredo (Union), the holder of the depository contract at that time, requested the City to postpone the submission of bids until July 14, 1980. The City agreed; a letter was transmitted to the City from Union which stated in part:
This will confirm that Union National Bank will continue to honor the terms of the contract now in existence, until the bidding process is completed, and a new contract is let pursuant to the recent action by the City Council, Tuesday, June 10, 1980.
Thereafter, a new submission date of July 14, 1980, was set by the City. Union’s bid arrived at 10:33 a.m.; three minutes after the bid submission deadline called for in the bid specifications. Upon opening the bids that day, it was ascertained that the Union was the high bidder. One of the other bidders, International Bank of Commerce of Laredo (Commerce), appeared before City Council and contended that Union should not be selected as City depository because Ray M. Keck, Jr., a member of the Board of Trustees of the City-owned Laredo Water, was owner of more than twenty percent (20%) of the stock of Union. Since funds of the Water Board as well as the City’s were involved, Commerce alleged a conflict of interest existed between City and Union which violated the charter of the City and the laws of the State of Texas. Commerce also claimed Union’s disqualification because of the tardiness of the bid delivery. Upon Union’s assurance that it would continue to honor the depository contract entered into between Union and City in 1978, the City Council passed a resolution on July 15,1980, to continue the depository contract with Union and institute a suit for declaratory judgment to determine the qualifications of Union to serve as depository under the depository contract that was to start July 15, 1980, and to end June 30, 1982. Shortly thereafter, suit for declaratory judgment was instituted by the City.
At a City Council meeting on November 4, 1980, a controversy arose within the Council as to the length of time it was taking to obtain the declaratory judgment. Also, there was discussion that interest rates on certificates of deposits were rising which might inure to the benefit of the City. However, City again by resolution reaffirmed its action of July 15,1980, to let the question of Union’s qualifications be settled by the court. On November 18, 1980, City reversed its position and rejected all previous bids on the contract and instructed the City treasurer to issue a notice for new bids. On December 1, 1980, Union advised the City of its intention to assert a claim for damages arising out of the refusal of the City to accept the bid of Union tendered to the City July 14, 1980. It re-tendered an identical bid to the bid tendered July 14, 1980, and also wrote a letter to the treasurer of the City of Laredo which states, in part:
Without waiver of its position that the bids heretofore submitted by Union National Bank of Laredo on July 14, 1980 should have been accepted by the City of Laredo and that there was not then, nor is there presently, any basis for the City Council refusing to accept said bids, Union National Bank hereby retenders such earlier submitted bids, copies of which are attached hereto, together with the requisite $500.00 certified checks called for in the bid notices; and again, urges the City Council to accept said bids. (Emphasis ours.)
Commerce tendered the highest qualified bid to the City on December 9, 1980, and Commerce and the City entered into a depository contract agreement. The City immediately attempted to transfer its deposits from Union to Commerce, but Union refused to transfer the funds. City filed a suit petitioning the court to order the transfer of the funds to Commerce, for damages, and indemnity over and against Union in the event City was found liable for failing to transfer funds to Commerce. Union responded and obtained a temporary injunction on December 30, 1980, prohibiting the transfer of City’s funds to Commerce. Union argued that it was the city depository under the 1978-1980 contract until its qualifications to serve as city depository had been adjudicated in the declaratory judgment suit. Commerce intervened alleging that it had been damaged by Union’s tor-tious interference with the depository contract it had with the City and sought, in addition, exemplary damages. Commerce also sued City for breach of the depository contract.
The case was tried to a jury, and the jury found the following:
1. That the City and Union did not agree that Union would continue to act as the City’s depository until the validity of Union to serve as the City’s depository was determined by the courts.
2. That City had been damaged in the amount of $215,000.00.
3. That the Union had waived its right to insist on the July 14th bid when it submitted its subsequent bid on the depository contract.
4. That the City had waited a reasonable time before terminating the agreement of July 15, 1980 with Union by awarding the depository contract to Commerce on December 9, 1980.
5. That Union submitted its bid to City after 10:30 a.m. on July 14, 1980 and that the City had not waived a late filing.
6. That Commerce entered into the December 9,1980, depository contract in good faith and that Union had intentionally and willfully refused to transfer City’s funds to Commerce.
7. That Commerce had suffered actual damages of $454,053.41.
8. That Union’s conduct avoiding the transfer of funds was willfully and maliciously done and exemplary damages were assessed against Union in the amount of $500,000.00.
Union filed a motion for judgment notwithstanding the verdict. On June 11, 1981 the court entered a judgment which included the following:
1. Found as a matter of law, that on or about July 15, 1980, the City and Union entered into an informal agreement wherein it was agreed that Union would act as depository for the City until such time as the controversy concerned the qualifications of Union as such depository was resolved by judicial proceedings.
2. Found as a matter of law, that Union relied on such informal agreement and that City accepted benefits of such informal agreement by Union acting as depository after such agreement was made.
3. Found that the City, as a matter of law, was estopped to deny the validity of such interim contract.
4. Found as a matter of law, that Union acted within its rights under the terms of said contract when it refused to transfer the City’s funds to Commerce.
5. Found as a matter of law, that Union acted within its legal rights when it threatened to sue the City if it were not given a new depository contract of 1980.
6. Found as a matter of law, that Union did not act with malice in refusing to transfer to Commerce the funds of the City on deposit with it on December 9, 1980.
7. Found as a matter of law, that Union did not act with malice when it' threatened to sue the City if it were not given the depository contract.
8. Found as a matter of law, that Union was not disqualified to act as depositor for the City and had not been so disqualified to act as depository at any time relevant to the lawsuit.
9. Found that the City of Laredo, in failing to comply with its contract of December 9th with Commerce was acting pursuant to the order of the Court and was not liable to Commerce for breach of said contract.
10. That the City recover nothing against Union.
11. That Commerce recover nothing against either City or Union.
12. That the City was not obligated to award a depository contract to Union for the balance of the contract period ending June 30,1982 based on the bids submitted by Union on July 14, 1980.
Both Commerce and the City seek to set aside the trial court’s judgment extending the July agreement with Union and as a corollary argue that the City could not be estopped to deny the agreement. Commerce and City also urge that contrary to the court’s findings and conclusions, Union was disqualified as a matter of law to serve as the City depository. The City seeks to overturn the take-nothing judgment rendered against City and in favor of Union.
Commerce contests the take-nothing judgment on its breach of contract action against the City based on the December 9, 1980 agreement. Similarly, Commerce requests the reinstatement of the jury verdict against Union for tortious interference and the accompanying punitive damages.
Union, by its sole point of error and one of its cross-points, argues that it was entitled, as a matter of law, to a ruling upholding the 1980-82 depository contract. Keck’s position, as an officer of the Water-board and as owner of twenty percent (20%) of Union stock is, in Union’s view, not a fatal conflict of interest. Moreover, Union contends that the question of its possible disqualification as a City depository was resolved by previous litigation which is res judicata to any determination by the court in this cause. The remaining cross-points asserted by Union concern the trial court’s denial of peremptory strikes and objection to the charge and the sufficiency of the evidence supporting the City’s cause of action against Union.
When a trial court disregards the jury’s answer to special issues, it is the duty of the appellate court to review the evidence in a light most favorable to the losing party, resolving all conflicts and inconsistencies in favor of the losing party. It should also infer in favor of the losing party all evidence that can reasonably be deducted. The losing party, however, has the responsibility to show that some evidence was introduced which would sustain his cause of action and to show the appellate court that the verdict of the jury could not be supported by appellees’ motion. Guynn v. Corpus Christi Bank & Trust, 589 S.W.2d 764, 769-70 (Tex.Civ.App.—Corpus Christi 1979, writ dism’d) (review of instructed verdict).
With these principles, and the various positions of the parties on appeal in mind, we proceed to the merits. For purposes of clarity, we will address the parties’ contentions in the following manner: (1) The July agreement between the City and Union and the estoppel of the City to deny the contract; (2) Union’s conflict of interest and the 1980-82 contract; and (3) The December 9, 1980 agreement: Commerce’s action for breach of contract and tortious interference.
I. The July agreement between the City and Union and estoppel against the City.
City and Commerce contend that the trial court erred in disregarding special issue one wherein the jury found that Union and City had not agreed that Union would continue to act as the City’s depository until the validity of the legal objections to Union’s bid had been determined by the courts. We have diligently searched the record and have not found, nor have appellants drawn attention to any physical evidence introduced or testimony given to support their position. The City’s only witness dealing with that subject was Mayor Aldo Tatange-lo, who testified:
Q: All right sir, I’ll hand you your deposition that you gave Mr. Hornberger ... Mr. Hornberger asked you about what the nature of the interim agreement was that the City of Laredo entered in with Union National Bank of Laredo; do you recall that?
A: Yeah.
Q: And what was your answer please sir?
A: To my best recollection that the Union National Bank' upon a motion made by Councilman Ramos, and second by another Councilman, I believe Councilman Sanchez; that they accepted the agreement offered by the Union National Bank to continue to pay the same interest until the case was tried and decided by the court....
Do you recall that Councilman Ramos suggested that we would ... or inquired whether the Union National Bank would continue to act as depository for the 1978-1980 contract?
Yes....